|
Advanced Search Options
Case Laws
Showing 61 to 80 of 107 Records
-
1966 (9) TMI 68
Issues Involved:
1. Jurisdiction of the Court under Section 20 of the Arbitration Act, 1940.
2. Applicability of Article 137 of the Limitation Act, 1963.
3. Appointment of an Arbitrator for dispute resolution.
Detailed Analysis:
1. Jurisdiction of the Court under Section 20 of the Arbitration Act, 1940:
The primary contention raised by the Bihar State Electricity Board was that the application under Section 20 of the Arbitration Act is not maintainable in this court as it is not a "civil court" within the meaning of the Arbitration Act. The definition of "court" under Section 2(c) of the Arbitration Act was cited, which states: "'Court' means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court." The Board argued that the expression "civil court" should not be synonymous with any court that has jurisdiction to decide civil rights. The official liquidator, however, relied on Section 446(2) of the Companies Act, 1956, which states: "The court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of-(a) any suit or proceeding by or against the company." The court concluded that under Section 446(2) of the Companies Act, it has jurisdiction to entertain and dispose of suits and proceedings by the company, notwithstanding any other law, thus allowing the present application.
2. Applicability of Article 137 of the Limitation Act, 1963:
The Board contended that the Limitation Act, 1963, applies to this case and that the application under Section 20 of the Arbitration Act is barred under Article 137, which prescribes a three-year limitation period from when the right to apply accrues. The Board argued that the right to apply accrued in 1960. The official liquidator countered that Article 137 does not apply to applications under the Arbitration Act and even if it did, the right to apply had not accrued before 9th June 1962. The court examined the relevant dates and correspondence, including letters dated 9th January 1960, 12th March 1960, and 18th May 1960, which indicated ongoing negotiations and no definitive accrual of the right to apply. The court concluded that the right to apply did not accrue before 9th June 1962, making the application timely under Section 458A of the Companies Act. The court also held that Article 137 does not apply to applications under the Arbitration Act, maintaining the interpretation from previous Supreme Court decisions.
3. Appointment of an Arbitrator for dispute resolution:
The court directed the Bihar State Electricity Board to file the original agreement dated 6th July 1956 within two weeks. The dispute, as per paragraph 6(ii) of the agreement, was to be referred to an arbitrator mutually agreed upon by the parties. If no agreement on an arbitrator was reached within three weeks of filing the original agreement, the court would appoint an arbitrator. The court clarified that the parties involved are the Monghyr Electric Supply Company Limited (in liquidation) through the official liquidator and the Bihar State Electricity Board. No order was passed against the Government of Bihar due to Section 60(1) of the Electricity (Supply) Act, 1948.
-
1966 (9) TMI 46
Whether on a true interpretation of section 10(1), section 10(2)(xi) and section 10(2) (XV) of the Indian Income-tax Act, the claims for the losses of ₹ 48,891 and ₹ 1,21,760 were permissible in the assessment years 1953-54 and 1954-55 respectively?
Held that:- The settlements with the constituents and the consequent posting of entries in the books of account cannot be regarded as forbearance to enforce the claim of the bank to recover the loans advanced. The settlement consisted of two constituent elements---paying by the bank of the value of the jewellery pledged with it against receipt from the constituent the amount which was recoverable by the bank. The first element of the transaction would appropriately be deemed expenditure and such expenditure having been laid out for protecting and furthering the business of the bank was properly admissible under section 10(2) (XV) of the Income-tax Act, 1922. Appeal dismissed.
-
1966 (9) TMI 45
Issues:
Assessment of dividend income as the income of a Hindu undivided family. Interpretation of section 2(6A)(e) of the Income-tax Act. High Court's jurisdiction in a reference under section 66 of the Income-tax Act.
Analysis:
The case involved the assessment of dividend income as the income of a Hindu undivided family under the Income-tax Act. The assessee, a Hindu undivided family, held shares in a limited company, and the dividend earned on these shares was considered as the family's income. Additionally, the managing director's remuneration from the company was also treated as the family's income. In the assessment years 1955-56 and 1956-57, the family was charged tax on sums advanced as loans, claimed to represent dividend income under section 2(6A)(e) of the Act. The Tribunal held that since the family was not the registered shareholder of the company, the loans could not be treated as dividend income of the family.
The matter was referred to the High Court of Andhra Pradesh, which set aside the Tribunal's order and directed a reconsideration of whether the payments were made on behalf of or for the benefit of the shareholders. The High Court emphasized the need to assess payments made by a company for the individual benefit of a shareholder. However, the Supreme Court found the High Court's procedure erroneous, stating that in a reference under section 66 of the Income-tax Act, the High Court's role is advisory, not appellate. The High Court was required to answer the question posed and remit the case back to the Tribunal for further action based on its opinion.
Therefore, the Supreme Court set aside the High Court's order and directed the case to be remanded to the High Court for proper consideration and disposal in accordance with the law. The appeals were allowed, and the case was remanded without any order as to costs.
-
1966 (9) TMI 44
Whether, on the facts and in the circumstances of the case, the payment of ₹ 42,480 by the assessee to the Travancore Government under the agreements dated Jane 18, 1937, and January 28, 1947, was allowable under section 10 of the Income-tax Act ?
Held that:- It is not, however, possible for us to finally determine this appeal because the High Court has not dealt with the other questions arising in this reference. Even if the payment of the commission to the Government by the assessee is not capital but revenue payment, certain other questions arise for consideration in this case.
It is necessary that the High Court should consider all these aspects of the case before furnishing an answer to the question of law referred to it. For these reasons we allow this appeal, set aside the judgment of the High Court of Kerala dated August 20, 1963, and remand the case for being reheard and dealt with in accordance with the directions given in this judgment. Appeal allowed by way of remand.
-
1966 (9) TMI 43
Issues Involved:
1. Legality of the show cause notices issued under the Sea Customs Act, 1878 and Foreign Exchange Regulation Act, 1947.
2. Interpretation of Section 12(1) of the Foreign Exchange Regulation Act, 1947.
3. Validity of the notification dated 4-8-1947 under Section 12(1) of the Foreign Exchange Regulation Act, 1947.
4. Applicability of Section 23A of the Foreign Exchange Regulation Act, 1947 after its amendment by Act 55 of 1964.
Detailed Analysis:
1. Legality of the Show Cause Notices:
The show cause notices were issued by the Deputy Collector of Customs, Visakhapatnam, alleging that the petitioners had exported manganese ore without making a proper declaration as required under Section 12(1) of the Foreign Exchange Regulation Act, 1947. The respondents contended that the documents seized during the searches indicated under-invoicing of mineral ores, constituting offences under the Sea Customs Act, 1878, and the Foreign Exchange Regulation Act, 1947. The court held that contravention of Section 12(1) of the Foreign Exchange Regulation Act is punishable not only under Section 23(1)(a) of the same Act but also under Section 167(8) of the Sea Customs Act, 1878.
2. Interpretation of Section 12(1) of the Foreign Exchange Regulation Act, 1947:
The petitioner argued that Section 12(1) merely required an undertaking that the full export value of the goods would be paid in the prescribed manner, and did not necessitate the declaration of the true export value. The court rejected this argument, stating that Section 12(1) requires a declaration that the amount given is the full export value of the goods and that the value has been paid in the prescribed manner. The court emphasized that the purpose of the enactment is to safeguard the economic and financial interests of the country by ensuring that the best price for exported goods is remitted to India.
3. Validity of the Notification Dated 4-8-1947:
The petitioner contended that the notification prohibiting the export of all goods was beyond the powers conferred under Section 12(1) of the Act, which allowed the prohibition of any goods or class of goods specified in the notification. The court dismissed this contention, interpreting the word "any" to include all goods unless limited by the context. The court relied on the definition of "any" in Stroud's Judicial Dictionary and the High Court of Australia's interpretation in Victorian Chamber of Manufactures v. The Commonwealth, concluding that the Central Government acted within its powers.
4. Applicability of Section 23A of the Foreign Exchange Regulation Act, 1947 After Amendment:
The petitioner argued that after the amendment by Act 55 of 1964 and the repeal of the Sea Customs Act, 1878, no further proceedings could be taken for contraventions that occurred before the amendments. The court referred to Section 6(e) of the General Clauses Act, 1897, which states that the repeal of an enactment does not affect any investigation, legal proceeding, or remedy in respect of any right, privilege, obligation, liability, penalty, forfeiture, or punishment. The court held that the legal proceedings could continue as if the repealing Act had not been passed, thereby rejecting the petitioner's contention.
Conclusion:
The court dismissed the petitions, upholding the validity of the show cause notices and the interpretation of Section 12(1) of the Foreign Exchange Regulation Act, 1947. The notification dated 4-8-1947 was deemed valid, and the applicability of Section 23A after its amendment was confirmed. The petitions were dismissed with costs.
-
1966 (9) TMI 42
The High Court held that the Magistrate had no jurisdiction to release the truck in question to the opposite party. The Central Excise authorities suspected smuggling and had specific rules for seizure and release of property, which the opposite party did not follow. The Magistrate's order was deemed illegal, and the vehicle will be released to the opposite party pending adjudication upon execution of a personal bond and furnishing security.
-
1966 (9) TMI 41
Issues:
1. Jurisdiction of the Collector of Customs, Calcutta to issue a show cause notice.
2. Authority of the Collector of Customs, Madras to transfer the case to the Collector of Customs, Calcutta.
Analysis:
1. The petitioner, a dealer in kirana and chemicals, had goods seized by the Central Intelligence Unit of the Collectorate of Central Excise, Madras, which were despatched from Calcutta. The petitioner sought the return of the goods and challenged the jurisdiction of the Collector of Customs, Calcutta to issue a show cause notice. The Customs Act delineates officers' jurisdiction by territorial boundaries and pecuniary limits. While the Collector of Customs, Calcutta issued the notice, the contention was that as the goods were seized in Madras, the Calcutta Collector lacked jurisdiction. However, the Act empowers Customs officers to act subject to conditions imposed by the Board or the Act, without territorial restrictions. The Act's provisions on confiscation and penalties do not limit the Collector of Customs, Calcutta's jurisdiction based on the location of goods. The goods' origin in Calcutta and the alleged offense there support the Calcutta Collector's jurisdiction, despite the seizure in Madras.
2. The petitioner also challenged the authority of the Collector of Customs, Madras to transfer the case to the Collector of Customs, Calcutta. The Madras Collector's communication indicated a transfer of cases to the West Bengal Collector. The Act does not explicitly grant the Madras Collector the power to transfer cases to another jurisdiction. However, it was interpreted that the Madras Collector intended to hand over files to the appropriate jurisdiction rather than transfer jurisdiction itself. The decision on the Madras Collector's jurisdiction over the goods would depend on investigation findings. Ultimately, the contention that the Collector of Customs, Calcutta lacked jurisdiction was rejected, leading to the dismissal of the Writ petitions.
In conclusion, the High Court of Judicature at Madras upheld the jurisdiction of the Collector of Customs, Calcutta to issue a show cause notice and clarified the Madras Collector's action as a transfer of files rather than jurisdiction. As a result, the Writ petitions were dismissed.
-
1966 (9) TMI 40
Issues Involved:
1. Liability under Section 9(a) and 9(b) of the Central Excises & Salt Act.
2. Liability under Rule 151(c) of the Central Excise Rules, 1944.
3. Interpretation of mens rea in the context of Rule 151.
4. Vicarious liability for acts committed by employees.
5. Applicability of Rule 225 to Rule 151.
Detailed Analysis:
1. Liability under Section 9(a) and 9(b) of the Central Excises & Salt Act:
The prosecution argued that the respondent, a licensed tobacco dealer, had removed goods from his warehouse without adhering to the Central Excise Rules and without paying the duty levied on them, thereby contravening Section 9(a) and 9(b) of the Central Excises & Salt Act. The learned City Magistrate acquitted the respondent on the grounds that the prosecution failed to prove that the respondent was personally or through his servant liable for the shortages.
2. Liability under Rule 151(c) of the Central Excise Rules, 1944:
The prosecution contended that the respondent was liable under Rule 151(c) for removing goods from the warehouse otherwise than as provided by the rules. The City Magistrate, however, found that the prosecution did not establish the respondent's personal liability or that of his servant's actions, leading to the acquittal.
3. Interpretation of mens rea in the context of Rule 151:
The core issue was whether Rule 151 imposed absolute and unconditional liability on the owner of warehoused goods or required proof of mens rea. The judgment referred to the Supreme Court's decision in Nathoo Lal v. State of Madhya Pradesh, which established that mens rea is an essential ingredient of a criminal offense unless expressly or by necessary implication excluded by statute. The court found that Rule 151 did not expressly exclude mens rea, and its exclusion could not be implied as it was not absolutely clear that the object of the statute would be defeated otherwise.
4. Vicarious liability for acts committed by employees:
The prosecution argued that the respondent was vicariously liable for the acts of his servant, who allegedly committed the theft during the respondent's absence. The court, however, interpreted Rule 151 to mean that the owner could only be held liable for acts committed by employees if it was proven that these acts were done at the owner's behest, with his knowledge, or with his connivance. The court concluded that the prosecution failed to establish such proof, and therefore, the respondent could not be held vicariously liable.
5. Applicability of Rule 225 to Rule 151:
The State argued that Rule 225, which holds producers or manufacturers liable for the removal of goods by any person, should be applied to interpret Rule 151. The court rejected this argument, stating that applying Rule 225 would render the specific language of Rule 151 redundant. Rule 225 pertains to removals in violation of conditions laid down in Rule 224, which are distinct from those in Rule 151. Therefore, Rule 225 could not be used to interpret Rule 151.
Conclusion:
The court upheld the acquittal of the respondent on all counts. It held that mens rea was an essential ingredient for liability under Rule 151 and Section 9(a) and 9(b) of the Act. Since the prosecution failed to prove mens rea or the respondent's knowledge or connivance in the acts committed by his servant, the respondent was not criminally liable for the shortages or the evasion of duty. The appeal was dismissed.
-
1966 (9) TMI 39
Whether, on the facts and circumstances of the case, the salary paid or credited to a karta of the family for looking after the family's business was a permissible deduction under section 10(2)(xv) in computing the income of the family business?
Held that:- If a remuneration is paid to the karta of the family under a valid agreement which is bona fide and in the interest of, and expedient for, the business of the family and the payment is genuine and not excessive, such remuneration must be held to be an expenditure laid out wholly and exclusively for the purpose of the business of the family and must be allowed as an expenditure under section 10(2)(xv) of the Act.
-
1966 (9) TMI 38
Whether the Tribunal was not competent to go into the question whether the provisions of paragraph 2 of the Taxation Laws?
Held that:- It was certainly open to the department, in the appeal filed by the assessee before the Tribunal, to support the finding of the Appellate Assistant Commissioner with regard to the written down value on any of the grounds decided against it. It was argued on behalf of the appellant that the action of the Tribunal in remanding the case is not strictly justified by the language of rule 27 or rule 12. Even assuming that rules 12 and 27 are not strictly applicable, we are of opinion that the Tribunal has got sufficient power under section 33(4) of the Act to entertain the argument of the department with regard to the application of paragraph 2 of the Taxation Laws Order and remand the case to the Income-tax Officer in the manner it has done. It is necessary to state that rules 12 and 27 are not exhaustive of the powers of the Appellate Tribunal.
We are accordingly of the opinion that the Tribunal had jurisdiction to entertain the argument of the department in this case and to direct the Income-tax Officer to find whether any depreciation was actually allowed under the Industrial Tax Rules and whether such depreciation should be taken into consideration for the purpose of computing the written down value. Appeals dismissed.
-
1966 (9) TMI 37
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rupees forty thousand two hundred and forty-seven could not be deemed to be profits of the assessee-company under the second proviso to section 10(2)(vii) of the Indian Income-tax Act ?
Held that:- In the present case it is true that the entire assets of the appellant-company were sold to Messrs. Phelps & Co. Ltd. There was no separate sale of different items, but the consideration of each item of property sold was expressly mentioned in the agreement of sale. The contention that the transaction of sale was a mere attempt to readjust the business position of the transferor was never raised before the Tribunal and does not arise out of the order of the Tribunal.
We decide this appeal on the narrow ground that the appellant-company sold the property in the second schedule for a stated consideration which was not shown to be notional, and since the consideration was in excess of the original cost of the building, the difference was profit within the meaning of section 10(2)(vii), second proviso. Appeal dismissed
-
1966 (9) TMI 36
Whether the Income-tax Officer had jurisdiction to initiate proceedings for the assessment year 1951-52 under the provisions of section 34(1)(a) of the Indian Income-tax Act of 1922 ?
Held that:- The Tribunal has found that there was direct connection or nexus between the assessee's omission or failure to make a return and the under-assessment made by the Income-tax Officer for the year 1951-52. The High Court has affirmed this finding and concluded that the proceedings under section 34(1)(a) of the Act were not defective in law. Appeal dismissed.
-
1966 (9) TMI 35
Whether in view of rule 13 framed by the U. P. Government in exercise of the rule-making power under the Act, the assessing authority was incompetent to allow as expenses any amount other than the amounts actually paid by the assessee on account of agricultural operations metioned in that rule?
Held that:- The expenses by the respondent had been claimed on the basis of a yield which, according to the assessing authority, was lower than the actual yield. The assessing authority, therefore, estimated the produce at a higher figure, and we do not see any reason why, when the assessing authority estimated that the produce was higher than that shown by the respondent, he could not also estimate that the expenses incurred in respect of that higher produce must have been larger than the amount actually shown by the respondent. The assessing authority, in thus estimating the allowable expenditure at a figure higher than the amount claimed by the respondent, had full justification in the circumstance that he had estimated the produce also at a higher figure. The answer returned by the High Court was, therefore, perfectly correct. The appeal fails
-
1966 (9) TMI 34
Whether the expenses of ₹ 20,035 incurred in the assessment year 1949-50 and ₹ 5,912 (relating to the assessment year 1950-51) being the cost paid to Government as directed by the Privy Council were expenses incurred in the ordinary course of business and allowable as deductions ?
Held that:- Expenditure incurred to resist in a civil proceeding the enforcement of a measure--legislative or executive--which imposes restrictions on the carrying on of a business, or to obtain a declaration that the measure is invalid would, if other conditions are satisfied, be admissible, in our judgment, under section 10(2)(xv) as a permissible deduction in the computation of taxable income.
The appeals are therefore allowed in favour of assessee.
-
1966 (9) TMI 33
Whether the Income-tax Appellate Tribunal had evidence or material for the finding that there was deliberate fabrication of the accounts by the assessee-company in order to claim the loss in the return and the imposition of penalty upon the company under section 28(1)(c) of the Act is proper and valid ?
Whether in view of the finding of the Tribunal, in the appeal against the assessment, that the transaction was not a trading transaction of the company, the company could be made liable for penalty under section 28(1)(c) of the Act ?
Held that:- The question on which a reference to the High Court was sought was a limited question and the Tribunal declined to refer the question because it did not arise out of its order, the question not having been raised before or decided by the Tribunal. The question sought to be raised before the High Court in a reference under section 66(2) was not an aspect of a question raised before the Tribunal : it was a new question which was never raised before the Tribunal. The High Court was, therefore, right in rejecting the prayer for an order under section 66(2) of the Act. Appeal dismissed.
-
1966 (9) TMI 32
The Supreme Court dismissed the appeal of a public limited company regarding the disallowance of a deduction claimed for compensation paid for breach of contracts related to the purchase of textile machinery. The court held that the payment was a capital expenditure to avoid unnecessary investment in assets, not for the purpose of earning profits, and therefore not eligible for deduction under the Income-tax Act. The decision was based on the nature of the payment and previous legal precedent.
-
1966 (9) TMI 31
Whether, on the facts and in the circumstances of the case, the amount of ₹ 25,700 paid by the assessee by way of penalty to the Government of Orissa shall be an admissible deduction under section 10(1) of the Income-tax Act, 1922 ?
Held that:- What the appellant had claimed was that, in the computation of profits and gains of business, profession or vocation under section 10(1) of the Act, this amount should be deducted, which was intended to mean that this amount should not be included in the computation of the profits and gains of the business. The word " deduction " appears to have been used by the appellant as well as by the Tribunal only because the dispute related to a sum which had been deducted by the Government of Orissa as a penalty from the amount due to the appellant for the supplies made by him in pursuance of the agreement. The High Court, therefore, in answering the question referred to it, should not have gone into the question of the applicability of section 10(2)(xv) of the Act at all, and should have confined itself to deciding whether this amount deducted from the claims of the assessee by the Government of Orissa was liable to be excluded when computing the income under section 10(1) of the Act. The decision given by the High Court is, therefore, liable to be quashed and a direction is necessary to the High Court to answer the question really referred to it. Appeal allowed.
-
1966 (9) TMI 30
Whether the sum of ₹ 1,11,090 paid as remuneration to the five directors of the assessee-company during the relevant previous year was an expenditure incurred wholly and exclusively for the purpose of the business under section 10(2)(xv) of the Income-tax Act ?
Held that:- The payment of the commission was made to the directors for extra-commercial reasons and was not wholly and exclusively made for the purpose of the business. the expenditure was not incurred wholly and exclusively for the purposes of the business of the appellant-company thus the appellant was not entitled to claim deduction of this expenditure under section 10(2)(xv) of the Income-tax Act. Appeal dismissed.
-
1966 (9) TMI 29
Issues:
Interpretation of section 10 of the Estate Duty Act regarding the inclusion of gifted property in the computation of the deceased's estate.
Detailed Analysis:
The judgment involves a dispute regarding the inclusion of a gifted property in the estate left by the deceased under the provisions of section 10 of the Estate Duty Act. The deceased had transferred a portion of his capital to his sons, who later became partners in the firm. The accountable persons contended that the deceased did not retain any interest in the gifted amount or profits, while the tax authorities argued that the gifts should be considered as property passing on the deceased's death.
The Assistant Controller of Estate Duty held that the amount transferred by the deceased to his sons constituted gifts and should be included in the estate. The Appellate Controller and the Tribunal also upheld this view, relying on previous case law. However, the Tribunal emphasized that the deceased had not received any benefit from the gifted property, as it was proportionate to the money invested, and the sons were independent partners in the firm.
The Tribunal's decision was subsequently rectified, increasing the amount to be included in the estate. The reference to the High Court under section 64(1) of the Act sought clarification on whether the increased sum should be part of the deceased's estate. The High Court analyzed the provisions of section 10, emphasizing the requirement that the donor must not retain any benefit from the gifted property for it to be included in the estate.
The Court noted that the gifts in question were shares in an existing firm, and the profits were being paid to the donees since the gifts were made. It concluded that the deceased did not retain any benefit from the gifted property, as the donees had legal possession and management of the assets. Therefore, the Court held that the gifted property did not fall within the scope of section 10 of the Act, and the increased sum should not be included in the computation of the deceased's estate.
In conclusion, the High Court ruled in favor of the accountable persons, stating that the sum in question should not be included in the estate left by the deceased. The Court awarded costs to the assessee and clarified the interpretation of section 10 in the context of gifted property and estate duty computation.
-
1966 (9) TMI 28
Undisclosed profit - In the return filed by assessee showed a loss and after making certain adjustments the registered accountant of the assessee admitted a loss - held that there was no material for the Tribunal to come to the conclusion that the sum of Rs. 8,050 was an undisclosed profit and assessable as such in her account
|
9911796707
